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Postcard: People's Car

By Bernhard Rieger

The Environmental Protection Agency’s announcement on
September 18 that Volkswagen had manipulated diesel engines during
emissions tests sent shockwaves around the Western world. Facing hefty
fines in the United States and elsewhere, the corporation soon revealed
that no fewer than 11 million of its vehicles were powered by an engine
that it had previously praised as ecologically friendly and now revealed
as a generator of hazardous exhaust. The company’s stock took a dive,
CEO Martin Winterkorn had to resign, and drivers on both sides of the
Atlantic filed class action lawsuits. German engineering, once a
catchword for excellence, has now gained a set of decidedly undesirable
connotations.
Beyond anger, the international response to
Volkwagen’s fraud has been tinged with disbelief. Politicians, experts,
and ordinary citizens alike have struggled to comprehendwhy Volkswagen, of all companies,
engaged in systematic cheating. Observers were not only flabbergasted
that a high-profile car manufacturer had risked sizeable fines from
regulators as well as claims for damages by consumers, stockholders, and
dealers. They were also stunned at the reputational risk. For
Volkswagen, as a U.S.-marketing expert pointed out, being caught
cheating was “significantly damaging” because “this is such an iconic brand.” In Germany, the business-friendly Frankfurter Allgemeine Zeitung simply declared that Volkswagen had lost its “honor”—a concept rarely evoked in the context of global corporate giants.
Volkswagen thus finds itself at the center not just of an economic disaster, but a moral scandal of international reach.

Fernando Donasci / Reuters A
Volkswagen Beetle toy is seen in front of Beetle cars during
celebrations of the National day of the Beetle in Sao Bernardo do Campo,
January 23, 2011.

In all this, the strange thing is how out of
proportion the reaction in the United States has been to Volkswagen’s
actual commercial position. Although the company’s market share has
hovered below four percent for decades, its name retains strong cultural
resonance due to memories of the legendary Beetle. Small,
indestructible, unconventional, cute—these are the attributes that the
American middle-class remembers decades after the original automobile
disappeared from dealerships. The “bug” gained these positive
associations in the United States despite its unsavory origins in the
Third Reich, where Adolf Hitler had commissioned automotive engineer
Ferdinand Porsche to develop an economical and sturdy vehicle that would
motorize Nazi Germany. Never put into mass production before 1945, the
small rounded vehicle designed in the late 1930s became an international
bestseller during the postwar boom of the 1950s and 1960s. In an
American auto market dominated by lavish vehicles with two-tone pastel
paint jobs, high horsepower, ample amounts of chrome and tail fins, the
diminutive import proved attractive for middle-class families in the
expanding suburbs who needed an inexpensive and dependable second car
for everyday chores.

Woodstock attendees sit on a Beetle.

The Beetle thus came to signal that its owner had an eye for a
reasonable product and resisted automotive ostentatiousness. The car was
honest; it was individual. Unlike Detroit’s heavily marketed products,
this vehicle held out no false promises. It was this core attribute that
laid the foundations for the Beetle’s appropriation in a variety of
American social contexts that placed a premium on individualism,
including the hippies who famously covered their bugs in psychedelic
swirls and daisies.
The VW Corporation reinforced the bug’s
association with unconventionality and honesty through highly effective
marketing drives. Striking up a long-term cooperation with ad agency
Doyle Dane Bernbach, VW promoted its main product through campaigns
that—in contrast to common practice—employed humor and irony to extol
the virtues of the Beetle. The most famous of these ads encouraged
drivers pondering a Beetle purchase to “think small,” implying that size
mattered but not in the way other automotive companies thought.
Volkswagen
continued to make humorous advertising one of its corporate signatures
long after the end of Beetle sales in 1980, appealing to middle-class
drivers as it struggled to defend its market share in the United States.
In recent years, the company repeatedly attracted note for its funny
and irreverent ads, not least those that ran during Superbowl breaks.

In 2011, for example, the company landed a
spectacular hit with a clip showing a little boy running around a
middle-class home in a Darth Vader costume to the Star Wars soundtrack,
trying to bring “the force” to bear on the family dog, his sister’s
doll, domestic appliances, and his afternoon snack. His frustrations
mount; nothing reacts to his increasingly insisting hand gestures until
he mounts places himself in front of the VW Passat his dad has just
parked in the driveway. Much to the boy’s shock, the car blinks and
flashes after he motions—because his dad, smiling from the kitchen, has
operated the car’s remote keys. Four years later, this ad had over 62
million Youtube hits, nearly four times as many as Chrysler’s
highly effective commercial entitled “Imported from Detroit” that
features Eminem.

Despite low sales, Volkswagen has thus retained a disproportionately
high cultural visibility in the United States that drew heavily on its
reputation as a trustworthy purveyor of cars for discerning drivers. By
cheating on emissions, the company not only enraged its American
customers, it also displayed a deceptiveness that is impossible to
reconcile with a corporate image of down-home, no-nonsense
trustworthiness.
If news about Volkswagen’s emissions
manipulations made waves in the United States, it unleashed a tsunami in
Germany. With a turnover in 2014 of 200 billion euros (almost
$225 billion)—the equivalent of two-thirds of Federal Republic’s annual
state budget—and its 600,000 employees worldwide, Volkswagen is
Germany’s largest corporation by a wide margin. It is one piece of a
sector that directly and indirectly provides one in seven jobs in the
country. Many Germans regard the company not just as a corporate giant
but as a national institution. In a recent Yougov poll, two-thirds of
respondents picked Volkswagen as their country’s foremost national
symbol. Goethe came a distant second, and the country’s much-celebrated
soccer team, which won the world championship last year, barely scraped
onto the podium.

The GuardianAssembly lines at Volkswagen auto works plant in Wolfsburg, West Germany, June 1954.

Volkswagen owes its prominence in the national pantheon not primarily to
its size but to its social and economic role in postwar Germany. When
the Federal Republic of Germany started out in 1949, it was as the
Western half of a divided nation whose collective symbols had been
thoroughly discredited by the Third Reich’s radical nationalism. West
Germany was hungry for a new identity and, in the 1950s, Volkswagen
emerged as one of the country’s earliest success stories. Expanding
rapidly due to an export boom (not least fueled by middle-class
Americans) as well as strong demand at home, the motor works in
Wolfsburg and the small car produced there became the undisputed symbols
of the German Wirtschaftswunder (economic miracle). As the company attracted attention for paying its workers the highest wages,
its main product—the Beetle—began to mass motorize the young country.
The car’s omnipresence offered proof that West Germany had left the
rubble of the past behind and was driving into a prosperous future. That the “people’s car”
dated back to the Third Reich was no obstacle to its postwar stardom.
On the contrary, West Germans read the proliferation of the car in the
1950s as proof of the superiority of the postwar order over the Third
Reich, which had promised but never delivered mass motorization and
prosperity.
The Ford of the Federal Republic thus gained
singular cultural salience. Countless West Germans praised the vehicle’s
quality and dependability. The Beetle quickly became a screen onto
which the hopes of millions of Germans were projected. In the United
States, the car might have signified unconventionality, but back in the
Federal Republic, it symbolized a thoroughly conventional normality in a
stable and legitimate postwar order. Volkswagen replaced the Beetle
with the Golf (sold as the Rabbit in North America) in the 1970s, and
this European bestseller quickly extended Volkswagen’s domestic
reputation for dependable quality. To this day, Germans associate
Volkswagen with unspectacular yet dependable products.
Now, by
manipulating emissions data for years, Volkswagen did more than cheat
regulators and customers. Given its extraordinarily rich and
long-standing reputation for quality and dependability, Volkswagen
committed a cardinal sin against its own identity. It blemished its “corporate soul,”
as historian Roland Marchand called the intangible aura surrounding
those enterprises that manage to project themselves in the public sphere
as socially and economically responsible agents. To regain customers’
trust, public penance will not be enough. Rather, it will need to
undertake demonstrable reforms to assure the public that there are
robust internal procedures to prevent fraud. Only then will Volkswagen
be in a position to build anew.